Novo Nordisk’s One-Time Windfall Masks a Deeper Squeeze as Pipeline Bets Take Shape

A massive accounting adjustment made Novo Nordisk’s first-quarter numbers look spectacular, but strip away the one-off gain and a more troubling picture emerges. The Danish drugmaker reported a 32% jump in revenue to nearly 97 billion Danish kroner, almost entirely driven by the reversal of provisions tied to a US price-control program. Without that boost, both currency-adjusted sales and operating profit grew only in the mid-single digits.

The real weakness is in America. Adjusted revenues in the US fell 11%, with the diabetes franchise — Ozempic and Rybelsus — taking the hardest hit from declining volumes and relentless pricing pressure. Chief Financial Officer Karsten Knudsen confirmed that Ozempic prices in the US are eroding by double digits annually, squeezing the group’s adjusted gross margin to just under 81%.

The Pill That Brings in New Blood

Obesity treatments are providing some cover. The segment grew 22% on an adjusted basis, though Wegovy injections managed only 12% growth, narrowly missing analyst expectations. The real story is the oral version of Wegovy. According to US commercial chief Jamey Millar, nearly 80% of patients using the pill are first-time buyers of GLP-1 drugs — not converts from the injectable. CEO Mike Doustdar sees this as a clear market-expansion play rather than cannibalization.

That matters because the competitive landscape is heating up. Rival Eli Lilly recently reported triple-digit growth for its competing products and launched an oral obesity drug called Foundayo in early April. Novo Nordisk is fighting back with Wegovy HD, a high-dose formulation approved by the FDA in March that delivered nearly 21% average weight loss in clinical trials.

Should investors sell immediately? Or is it worth buying Novo Nordisk?

A Pipeline Built for the Post-Semaglutide Era

The company is racing to diversify beyond its blockbuster GLP-1 franchise. A key milestone is the US approval of Awiqli, the first weekly basal insulin to hit the market. Novo Nordisk plans to launch it in the second half of this year, and analysts see peak annual sales of up to $3 billion.

The urgency is real. Semaglutide’s patent protection expires this year in several countries, including India and China, where cheap generics are already appearing. Only China’s patent runs until April 2027, buying the company a little more time. To prepare, Novo Nordisk is pushing forward with new assets: Etavopivat, a treatment for sickle cell disease, hit all primary endpoints in a late-stage study, and the company has just launched a Phase 3 program for Zenagamtid, another obesity candidate.

AI and the Shareholder Payout Machine

Research is getting a technological boost. Novo Nordisk has struck a partnership with OpenAI to use artificial intelligence for analyzing complex data and accelerating drug development. Pilot projects are already running in research and manufacturing, with full integration targeted by the end of 2026.

Novo Nordisk at a turning point? This analysis reveals what investors need to know now.

Despite the operational headwinds, management is keeping the cash flowing to shareholders. Nearly 38 billion kroner went out the door in the first quarter through dividends and share buybacks. The company also nudged its full-year guidance slightly higher, now expecting revenue and profit to decline by a maximum of 12%, compared with an earlier forecast of up to 13%. Analysts at Jefferies were unimpressed, noting that the lower end of the range remains unchanged at minus 12%.

The stock has rallied 21% over the past 30 days to around €39, though it remains roughly 13% lower year-to-date. The next major update comes on August 5, when the half-year report will offer a clearer view on how the generics threat is playing out.

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Novo Nordisk Stock: New Analysis - 8 May

Fresh Novo Nordisk information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

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